The given report cannot be used as the only source to derive the
conclusions about the functioning of the production department.
Other reports from which the given values are derived should also
be attached to the main report. The principle of exception
reporting is also not complied. An exception report is a summary
report that indicates those events which are outside the scope of
standard range. In the present report those events are not reported
which do not fall under the scope of normal range. The production
manager has spent a lot of time in discovering the facts that gave
rise to spoilage.

The frequency of the report should be decided keeping in mind
the following factors:

• Nature of activities and entries: If the
activities and entries performed by the organization are complex
then frequency of reporting will be frequent. If financial
statements are simple to go through then less reports are
required.

• Management’s requirement: The number of reports
also depends upon the management of the company. If the management
requires the interim reporting frequently to check the efficiency
of their activities then frequency of reporting will be higher.

The production cost report should be directed to the production
manager of the organization.